She loves you but thinks the other guy is cute? Well maybe she does love you but is trying to make you jealous by saying that your friend is cute. But, it depends on you how you feel about her if you like her let her now but if not then also tell her that it's sweet that she likes you but you are not interested. Plus she thinks your friends cute so she could go with him !
The day I stop looking at and appreciating a good looking man is the day my family needs to go pick out my coffin. That looking and appreciating doesn't mean a darn thing. She should be a little more discrete, though. After all the male ego can be fragil.